‘Keep calm and carry cash’: Banknotes at home are key to preparing for crises like war, study shows
European Central Bank study shows cash demand surged over €140 billion during crises like the pandemic and Ukraine war, prompting authorities to recommend 72-hour cash reserves for emergencies.
- Wednesday, the European Central Bank published research showing consumer demand for banknotes surged during crises and urged households in the euro area to 'keep calm and carry cash'.
- The COVID-19 pandemic triggered sustained cash hoarding during uncertainty, while Russia's full-scale invasion of Ukraine caused local surges in cash demand near conflict zones.
- Data show daily net issuance peaked at 80 million and averaged 38 million versus a 28 million counterfactual in countries bordering Ukraine or Russia.
- European authorities now advise households to stockpile food, essentials and cash for at least 72 hours, while Sweden recommends cash for a week and authorities distributed booklets on crisis preparedness.
- From a systems perspective, household cash holdings provide essential redundancy as a 'spare tire' for payment rails, while central banks and the private sector must ensure adequate stocks as banknotes represent over 10% of euro area GDP.
33 Articles
33 Articles
TÉMOIGNAGES - The European Central Bank has recommended on Wednesday to keep a few tens of euros in cash in the event of a crisis. Today, only a quarter of French people, according to a recent study by the Bank of France, keep money under their mattresses.
"Keep Calm and Carry Cash": so the characteristics of cash become indispensable "during crises and can be used to prepare for crises"
The ECB study does not set a minimum amount of cash that households should have. However, it does point out that there should be an amount per person in each household, for times of need.
The European Central Bank recommends that European citizens keep a fairly large amount of cash at home in order to deal with all kinds of crises, a case in point in the Netherlands or Norway.
Despite digital payments, demand for cash is increasing. Why bills become "replacement tires" in times of crisis.
A note published this Wednesday on the website of the European Central Bank explains the interest of always keeping a certain amount of money in cash at home.
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